Oct. 9 (Bloomberg) -- Venezuelan President Nicolas Maduro requested special powers from the National Assembly yesterday to fight the world’s highest inflation rate, the collapse of public services and shortages of goods ranging from milk to beer.
The former bus driver asked lawmakers for the right to govern by decree for 12 months to “unfold a permanent offensive against the corrupt and their political backers.” In a speech to the assembly, he accused businesses of “waging economic war” by hoarding goods and speculating on foreign exchange controls.
The decree would enable Maduro to either deepen state control of the economy or loosen foreign exchange controls to stimulate production, said Asdrubal Oliveros, director of Caracas-based research group Ecoanalitica.
The governing coalition of late President Hugo Chavez is one vote short of the three-fifths majority required by the constitution to pass the so-called enabling law used for special presidential powers. Assembly President Diosdado Cabello said after Maduro’s speech that he’s confident the law will be approved.
Opposition leader Henrique Capriles Radonski, who won 49 percent of the vote in April’s presidential election, warned the government against pushing through the bill without a three-fifths majority.
“The government would have to come in with tanks and rifles if they want to apply this enabling law,” he said in his weekly address broadcast on the Internet.
Maduro argued for more than two hours at the assembly in Caracas that the future of Chavez’s socialist legacy depends on the approval of his request.
Chavez, who died from an undisclosed type of cancer in March, ruled by decree for 4 1/2 of his 14 years in power. He used those powers in 2008 to strip the legislature’s oversight of government borrowing, give him control in appointing regional officials and allow for a wide range of economic intervention.
Since winning the narrowest Venezuelan elections in 45 years, Maduro has overseen record shortages, inflation and black-market dollar exchange rates. The economy will grow 0.9 percent this year, down from 5.6 percent in 2012, according to a median estimate of 13 economists surveyed by Bloomberg.
Inflation reached 45.4 percent in August as the scarcity index hit 20 percent, meaning that one out of every five consumer staples is out of stock at any given time.
In the Black
A transmission line failure left about 60 percent of Venezuelans without power Sept. 3, while a pipe explosion left 60 percent of Caracas without water in August.
“The government doesn’t want to assume any responsibility for the economic performance,” Oliveros said by phone from Caracas yesterday. “The enabling law is going to give them legal backing for their claim that they are in an economic war started by the private sector.”
Assembly President Cabello said yesterday the decree bill would be debated in a separate session without specifying a date. An enabling law needs to be debated in two separate sessions before approval, according to Leonardo Palacios, a constitutional lawyer at the Andres Bello Catholic University in Caracas.
No sessions are planned for this week, an Assembly spokeswoman, who can’t be named because of internal policy, said today.
Venezuela’s borrowing costs surged this month to the highest in the world. The 10.29 percentage-point extra yield investors demand to hold dollar-denominated bonds instead of Treasuries is higher than Argentina’s for the first time in almost a year and compares with an average 7.06 percentage-point gap for junk-rated, emerging-market borrowers.
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